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May Review 2013
Karoon Gas ‐ Snapshot1
Karoon Review May 2013
Brazil farmed‐out 35% equity to Pacific Rubiales Energy Corp (PRE) (subject to regulatory approval)
Santos Basin Exploration Drilling Campaign progressing
Oil discovery at Kangaroo‐1
Emu‐1 oil shows
Bilby‐1 drilling ahead
Australian Browse Basin Drilling progressing – 6‐7 wells
Poseidon field:
Zephyros‐1 gas discovery (Kronos‐1 look‐ alike)
Boreas‐1 gas discovery flows at 30.2 mmscf per day (facility constrained)
Kronos‐1 gas discovery flows at 26 mmscf per day (facility constrained)
WA‐482‐P and WA‐314‐P 3D seismic planned for mid year
2
Investor Information
Karoon Review
Rank Name %ISC
1 Wellington Management Company LLP 11.90
2 Talbot Group 11.89
3 Robert Hosking 5.66
4 FMR LLC 5.34
5 Paradice Investment Management Pty Ltd 5.23
Substantial Shareholders 221 million shares
11 million unlisted options
Market capitalisation approx A$928 million @ A$4.20
Cash at bank A$210 million as at 30th April 2013
Company in S&P/ASX 200 Index
May 2013
3
Past. Present. Future.
Karoon Review
What we have doneAustralia
2005 ‐ Acquired WA‐314‐P and WA‐315‐P (100%) 2006 ‐ Farm‐out to ConocoPhillips 2007 ‐ Acquired WA‐398‐P (40%) 2009 ‐ Discovery of Poseidon 2010 ‐ Discovery and production test at Kronos‐1 2012 ‐ Discovery and production test at Boreas‐1 2012 ‐ Farm‐in to North Carnarvon Basin WA‐482‐P (100%) 2013 ‐ Discovery at Zephyros‐1
Brazil
2007 ‐ Awarded 5 Blocks in the Santos Basin Brazil 2010 ‐ Acquired wide azimuth 3D seismic survey (first in Brazil) 2012 ‐ Farm‐out 3 wells ‐35% to Pacific Rubiales Energy Corp* 2013 ‐ Discovered 42 API oil column at Kangaroo‐1 2013 ‐ Emu‐1 well drilled(oil &gas shows)
Peru
2008 ‐ Farm‐in to Z‐38 2009 ‐ Acquired 2D seismic 2010 ‐ Acquired 3D seismic
*Subject to regulatory approval
What we are doingAustralia
Appraisal and exploration drilling 6 ‐ 7 wells 2012‐2014
Browse Basin ‐ farming‐out an interest in WA‐314‐P
Brazil
Santos Basin, drilling of 3 wells. Commenced December 2012
Currently drilling Bilby‐1
Sourcing rig for Kangaroo discovery well
Peru
Tumbes Basin‐farming‐out an interest in Z‐38
Preparations continuing for a minimum two well drilling program expected to commence by early 2014 in Peru Tumbes Basin Z‐38
Where we are going Early entry into highly prospective basins, with high equity, larger
potential targets and a proven petroleum systems
Realise best economic outcome for shareholders by leveraging off large equity positions in early stage projects
May 2013
Key personnel
May 2013Karoon Review
4BOARD AND SENIOR MANAGEMENT
ROBERT HOSKING – EXECUTIVE CHAIRMANFounding Director and shareholder of Karoon Gas with 35 years of commercialexperience. Involved in the oil and gas industry for 18 years. Founding Director andshareholder of Nexus Energy
CLARK DAVEY – INDEPENDENT NON‐EXECUTIVE DIRECTOR30 years oil and gas accounting experience with PWC and private consulting. Energyand Resources tax specialist including experience with structuring and PRRT
MARK SMITH – EXECUTIVE DIRECTOR AND EXPLORATIONMANAGER30 years experience as a Geologist and Exploration Manager in petroleumexploration and development, mainly with BHPB in Australia, Southeast Asia andNorth America
SCOTT HOSKING – COMPANY SECRETARY AND CFOInternational financial and commercial management background with corporatefinance expertise
JOSE COUTINHO BARBOSA – NON‐EXECUTIVE DIRECTOR38 years experience in Petrobras Group, including director of Exploration andProduction, CEO of Braspetro, the international subsidiary of Petrobras, and actingCEO of Petrobras SA in several instances and Managing Director.
EDWARDMUNKS – SOUTH AMERICA DIRECTOR AND COO OF KGA32 years international experience. Was fundamental in the acquisition of the KaroonGroup’s exploration portfolio in South America. Also responsible for the company’sSouth American operations
STEPHEN POWER – NON‐EXECUTIVE DIRECTOR25 years as a commercial lawyer providing advice to participants in the resourcesindustry in Australia and overseas
TIMOTHY HOSKING – GENERAL MANAGER – SOUTH AMERICA10 years experience. Instrumental in the acquisition and consolidation of the SouthAmerican assets including responsibility for the government and private oil and gascompany relationships, which have resulted in Karoon’s current South Americanportfolio. Coordinated all field operations in Peru and Brazil
GEOFF ATKINS – INDEPENDENT NON‐EXECUTIVE DIRECTOR40 years experience in investigation planning design, documentation and project managementof significant port harbour and maritime projects.
KEY PEOPLE
DENNIS HINING – DRILLING MANAGER – SOUTH AMERICA40 years experience in the oil and gas industry. Former head of ExxonMobilWorldwide Ventures Group for Deepwater Exploration Drilling, Drilling Engineer forShell Oil. Experienced in Brazilian deep pre‐salt development projects
JORGE CAMERGO – ADVISOR TO THE BOARD34 years of experience in the oil and gas industry. Former President of Statoil andASA in Brazil. Worked for Petrobras for 27 years
BRIAN LUECKE – EXPLORATIONMANAGER – SOUTH AMERICA40 years International and US experience in the oil and gas industry with PhillipsPetroleum, IEDC, ARCO and Anzoil
GERMAN BARRIOS – ADVISOR TO THE BOARD25 years experience. Partner of Barrios Fuentes Abogados – a law firm in Peruspecialising in oil and gas law
Brazil assets – Regional Activity
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Location:Santos Basin, Brazil. 300‐450m water depth.On trend with Piracuca, Newton, Muluza, Maruja, Tiro and Sidon fields.
Prospective resource:12 prospects and leads firmed up including 2 inpre‐salt section.
Current Karoon Net Unrisked Mean ProspectiveResource in the Post salt, total 454 millionbarrels.
Pre‐salt values subject to additional work.
Karoon discovered resource:Kangaroo oil field (to be appraised)Gross contingent 3C 337 million bbls.
Maruja oil field.
Interest:100% interest in 5 blocks (reducing to 65%subject to regulatory approval and options inthe farm‐out to Pacific Rubiales Energy Corp.
20% interest in Block S‐M‐1352 (Subject to final regulatory approval)
Forward plans:Complete last of 3 well, program. Bilby‐1
Karoon/PRE Kangaroo oil discovery Jan 2013
May 2013
Brazil assets – Activity Summary
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Santos Basin Farm‐out:Agreement for Pacific RubialesEnergy Corp to acquire a 35%interest in Karoon’s wholly ownedSantos Basin Exploration Blocks, S‐M‐1101, S‐M‐1102, S‐M‐1037 , S‐M‐1165.
Pacific Rubiales Energy Corp:
Pay US$40 million in cash consideration.
US$210 million in carried well costs.
35% of all costs over and above the well carry commitment.
Drilling order:
1. Kangaroo‐1 (oil discovery)
2. Emu‐1(oil & gas shows)
3. Bilby (now drilling)
May 2013
Brazil Santos Basin – Drilling results
Karoon Review
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Kangaroo‐1 Oil Discovery
Pressure data confirms a 25 metre oilcolumn in Eocene interbedded sands.
Oil measured at 42 degrees API.
Petrophysical analysis estimatesreservoir porosities in the range 25 to32% with permeabilities tested in twosands at 100 to 300md.
Post drill Seismic interpretationindicates additional updiphydrocarbon potential with a grosscolumn in the structure ofapproximately 600 metres.
Deeper Eocene to Maastrichtianinterbedded sands are expected to bewithin the hydrocarbon columnhigher in the structure.
Negotiations are underway to securea rig to drill an updip appraisal well assoon as possible. Seismic strike section AA over the crest of the Kangaroo field. Purple horizon is Near Top
Eocene reservoir. Green line shows Oil Water Contact extrapolated over the field.
May 2013
Kangaroo‐1 Indicative Kangaroo‐2 location
200m
Brazil assets ‐ Contingent & Prospective Resources
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Kangaroo contingent resources:
Assessed in accordance accordingto PRMS standards.
1C value is low as the wellintersected the column near theOWC and no updip oil can beincluded in this category.
Additional Eocene levelProspective Resources:
The following table provides anarithmetic summation of theEocene level total prospectiveresources range for the prospects,Bliby Wallaby and Taipan.
Prospective resource:
Karoon predrill Net Unrisked MeanProspective Resource in the Postsalt, total 942 million barrels.
Pre‐salt values subject to additionalwork.
May 2013
Brazil Santos Basin – Bilby‐1Drilling
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Bilby Prospect:
Target intervals indicated in yellow (sandstones).
Targets are the EoceneCampanian and Santonian sandintervals which show a goodseismic DHI (Direct HydrocarbonIndicator).
Gross Prospective resource total for all levels – mean 110 mmblsto high case 170 mmbls.
Primary target mean 50 mmblsto high case 110 mmbls.
May 2013
Brazil Santos Basin – Presalt potential
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Stingray & Great White Prospects:
Additional large pre‐salt prospectscan now be explored with acreageretention assured with theKangaroo success and oil shows inthe Emu well.
3D seismic (MAZ) prestack depthmigration, allows theidentification of large closed pre‐salt tilted fault blocks.
Presalt seismic expressionmatches reservoir sequencecharacteristics in proven fields tothe east.
Multi‐billion barrel potential with400m of relief in the Stingray andGreat White prospects.
Karoon is planning new targeted3D to improve resolution.
May 2013
Santos Basin Indicative development model and economics
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May 2013
Santos Basin Indicative development model and economics
Karoon Review
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May 2013
Australian Assets
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May 2013
Australian assets – Browse Basin
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Location:Browse Basin, Australia. 450‐600m water depth. Ontrend with Torosa, Brecknock and Calliance gascondensate fields. Other fields: Icthys, Argus,Prelude and Burnside.
Karoon discovered resource: Updated third party reviewed Contingent Resourceassessments are expected to be available towardsthe end of the drilling programme.
Prospective resource:Outside greater Poseidon trend 8 prospects identified with Total Mean Unrisked Prospective Resource of 15 tcf.
Interest:40% in WA‐315‐P and WA‐398‐P 90% in WA‐314‐P
Forward Plans:Drilling order:1. Proteus 2. Grace *Additional wells to be determined
Program to continue into 2014.Farm‐out an interest in WA‐314‐P.
Objective:Define resource and progress to LNG development FEED stage.
May 2013
Karoon Review
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Zephyros‐1 results:
Zephyros‐1, located to the south west of other Greater Poseidon wells successfully tested a large tilted fault bock. The well penetrated a gas bearing reservoir sequence very similar to that evaluated in Kronos‐1. Extensive coring and wireline evaluation was carried out to gather all necessary data from the well. MDT pressure measurements indicate a deep gas water contact hundreds of metres below the TD of the well, very similar to that seen in Kronos‐1.
Australian assets – Browse Basin
Note: This data represents the views of Karoon Gas and do not necessarily represent the view of ConocoPhillips.
May 2013
Australian assets – North Carnarvon Basin
Karoon Review
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WA‐482‐P
Location:
North Carnarvon Basin, Australia.400‐2000m water depth. Ontrend with North Carnarvon BasinMungaroo plays and Phoenix gasdiscovery.
Prospective resource:
10 prospects and leads with billion barrel of oil equivalent potential.
Interest:
Earning 100%
Terms:
Farm‐in from Liberty Petroleum Corp.
Earn 100% by completing years 1and 2 work program of geologicaland geophysical studies andacquisition of 2010 sq km 3Dseismic.
Forward Plan:
Acquire seismicFarm Out
May 2013
Australian assets – North Carnarvon Basin
Karoon Review
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WA‐482‐P
Prospect example:
Prospective at a number oflevels from Lower Jurassic NthRankin beds to Triassic, Top andIntra‐Mungaroo Formationlevels.
10 kms
DELAMBRE 1
RMS AMPLITUDE MAPNORTH RANKIN BEDS
May 2013
Peru assets – Block Z‐38 – Tumbes Basin
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Location:
Tumbes basin water depths 300‐1000m. Close to fields that haveproduced over 1.6 billion barrelsof oil.
Prospective resource range:
16 prospects and leads identifiedwith current Net Unrisked MeanProspective Resources totalling1.92 billion barrels.
Interest:
75% equity in Z‐38 subject tocompletion of farm‐in terms withPitkin Petroleum Plc (formallyVamex).
Forward Plans:
Farm‐out to begin 2nd quarter 2013.
Drill a minimum of 2 wellsexpected to start early 2014. Rigcurrently being sourced.
Perspective resource estimates represent current interpretations by Karoon of available exploration data and are subject to material change and reinterpretation as exploration and appraisal proceeds
May 2013
Peru assets – Tumbes Basin Drilling candidates
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Merluza‐1 will test three overlying prospects, Balenn, Merluza H60 Mean Prospective Resource 51 mmbls
Baleen (all) – Mean Prospective Resource 189 mmbls
Marina‐1 will test five overlying prospect levels, H40, H50, H55, H70.
Mean Prospective Resource 392 mmbls
Marlin Prospect Zoritos level
Mean Prospective Resource 124 mmbls
Bonito Prospect
Mean Prospective Resource 360 mmbls
Merluza, Marina and Marlin Prospects
Target sand intervals indicated in yellow
MARINA
MERLUZA
BALEEN downdip
MARLIN H80
Baleen Target
H60 Targets
MarlinH80 Target
H40 Target
H50Target
H55Targets
H70 Targets
Marlin Target
Merluza Marina
May 2013
Peru Maranon Basin – Block 144
Karoon Review
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Location:
Maranon Basin, Peru. Ontrend with Situche Central oilfield. Close to under‐capacityoil export pipeline and majornavigable rivers.
Prospective resource range:
3 prospects being evaluated.
Interest:
100% equity.
Forward Plans:
Acquire 2D seismic in thesouth and east to betterdefine structure.
Objective:
Define prospective resource size prior to drilling.
Block currently in force majeure, pending enviromental approval.
Perspective resource estimates represent current interpretations by Karoon of available exploration data and are subject to material change and re‐interpretation as exploration and appraisal proceeds
May 2013
Activity summary
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May 2013
KAROON ACTIVITY2013 2014
Indicative time line (@ April 2013) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4BROWSE BASIN (Aust)Drilling (firm)Zephyros‐1
Proteus‐1Grace‐1Drilling options3D Seismic interpretation
NORTH CARNARVON BASIN (Aust)3D Seismic acquisitionProcessing 3D Seismic data3D Seismic interpretationWell option
SANTOS BASIN (Brazil)Kangaroo‐1
Emu‐1Bilby‐1Drilling Phase‐2 ‐ planning & approvalsKangaroo‐2 ‐ proposed
TUMBES BASIN (Peru)3D InterpretationDrilling ‐ planning & approvalsDrilling
MARANON BASIN (Peru)Drilling ‐ planning & approvalsNew 2D Seismic acquisition & processingInterpretation
DeGolyer & MacNaughton Assessment
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Low
Estimate
Best
Estimate
High
Estimate
Mean
Estimate
Risked
Mean
Estimate
Number of
Prospects
and Leads
GAS Net Contingent Gas Resource
Assessment date
September 2009 Poseidon Wet Gas (Tcf) 7.60 1
Net Prospective Oil Resources
September 2009
Total Net Australia Browse
Basin Wet Gas (Tcf) 1.80 4.50 11.20 5.80 1.60 7
OIL Net Prospective Oil Resource
September 2012
Brazil, South America Oil
(billion barrels) 0.46 0.86 1.54 0.94 0.25 12
September 2012
Peru, South America Oil
(billion barrels) 0.59 1.59 3.71 1.92 0.32 19
Total Net Prospective Oil
Resource (billion barrels) 1.04 2.45 5.25 2.86 0.56 31
Note: Excludes North Carnarvon Basin Permit WA‐482‐P, Maruja and Pre‐Salt Prospects in Brazil, and takes into account currentinterest in Z‐38 and the Pacific Rubiales Energy Corp farm‐out deal.
Summary of DeGolyer and MacNaughton assessments of Karoon's
Prospective and Contingent Resource Base as of 30th September 2009
and September 2012
May 2013
Disclaimer
Karoon Review
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This presentation has been prepared by Karoon Gas Australia Ltdfor professional and sophisticated investors. The informationcontained in this presentation is for information purposes onlyand does not constitute an offer to issue, or arrange to issue,securities or other financial products. The information containedin this presentation is not investment or financial product adviceand is not intended to be used as the basis for making aninvestment decision. The presentation has been preparedwithout taking into account the investment objectives, financialsituation or particular needs of any particular person.
No representation or warranty, express or implied, is made as tothe fairness, accuracy, completeness or correctness of theinformation, opinions and conclusions contained in thispresentation. To the maximum extent permitted by law, none ofKaroon Gas Australia Ltd, its directors, employees or agents, norany other person accepts liability, including without limitation,any liability arising out of fault or negligence, for any loss arisingfrom the use of the information contained in this presentation.In particular, no representation or warranty, express or implied isgiven as to the accuracy, completeness or correctness, likelihoodof achievement or reasonableness of any forecasts, prospects orreturns contained in this presentation nor is any obligationassumed to update such information. Such forecasts, prospectsor returns are by their nature subject to significant uncertaintiesand contingencies.
Before making an investment decision, you should consider, withor without the assistance of a financial adviser, whether aninvestment is appropriate in light of your particular investmentneeds, objectives and financial circumstances. Past performanceis no guarantee of future performance.
The distribution of this document in jurisdictions outsideAustralia may be restricted by law. Any recipient of thisdocument outside Australia must seek advice on and observe anysuch restrictions.
Petroleum exploration relies on the interpretation of complexand uncertain data and information which cannot be relied uponto lead to a successful outcome in any particular case. Petroleumexploration is inherently uncertain and involves significant risk offailure. All information regarding Prospective resource estimatesand other information in relation to Karoon’s assets is given inthe light of this caution.
May 2013